One of the key distinctions between an entrepreneur and an operating executive is an entrepreneur’s almost seamless agility in the face of changing circumstances versus an operating executive’s intense execution focus on a plan. World-class entrepreneurs learn how to combine both.

WTF?Driving home over the mountains from a Coastal Commission hearing, I had time to ponder an email I received from a city official as the road wound through the Redwood trees. The Coastal Commission had found that a zoning change his city requested didn’t conform to the Coastal Act, and we denied it. I felt sorry for him because he had put together a project that depended upon the property owner, developer, unions, hotel operator, local neighbors, city council, weather, wind speed, phase of the moon and astrological sign all aligning just to get the project in front of us. It was like herding cats and pushing water uphill. Reading his email I was sympathetic realizing that if you substituted customers, channel, product development, hiring, board of directors, and fund raising, he was describing a typical day at a startup. I felt real kinship until I got to his last sentence:

“Now we’re screwed because we had no Plan B.”

Say what?

I had to read his email a few times to let this sink in. I kept thinking, “What do you mean there’s no plan B?” When I shared it with the other commissioners who were public officials, all of them could see that there could have been tons of alternate plans to get a project approved, and there were still several options going forward. But the mayor just had been so intently focussed on executing a complex Plan A he never considered that he might need a Plan B.

By the time the mountain road unwound into rolling pastures and then flattened into the farmland just south of Silicon Valley, I realized that this was a real-world example of the difference between an entrepreneur and an operating executive.

There’s Always a Plan BMy formal definition of a startup is a temporary organization in search of a scalable and repeatable business model. Yet if you’ve founded a company you know that regardless of any formal definition, startups are inherently pure chaos. As a founder, keeping your company alive requires you to think creatively and independently because more often than not, conditions on the ground will change so rapidly that any original well-thought-out plan quickly becomes irrelevant. (It’s equally true for startups, war, love and life.)

The reality is that to survive requires a mindset which can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup.

To do this you are instinctually creating and testing multiple hypotheses which are creating an infinite number of possible future plans. And when the inevitable happens and some or all your assumptions were wrong, you pivot your model into the next plan and continue forward. You do this until you find a scalable and repeatable business model or you die by running out of money.

Great entrepreneurs don’t just have a Plan B, they have Plans B through ∞

Lessons Learned

A startup is initially about the search for a repeatable and scalable business model

Entrenched in the early stages of a start-up, I really appreciate your reminder for a plan B. Man, this is HARD. This is my third start-up and amazingly enough it doesn’t get any easier. It’s actually harder this time because I have a lot more to lose.

I just read Derek Sivers book and he quoted you as saying something like, (I’m paraphrasing sorry), no plan survives first contact with customer.

Formal decision analysis finally caught up with Charles Lindbergh’s solo flight of the Atlantic. He maximized the probability of success, while giving up on the probability of survival if he failed. (That is, carry as much gas as possible, no radio, no life-raft, etc.) That same analysis says that one wants to do the opposite if one is going to fly the Atlantic repeatedly; one wants to balance the probability of success against the probability of surviving if you don’t make it, which will happen eventually. When one is younger one often (tries to) maximizes the probability of success, while ignoring the probability of survival upon failure.

This leads to my favorite Robert Frost quote:
“Home is where when you go there they have to let you in.” In my 20’s I used to remind my mother of this often, when I was “performing” without a net.

I think your point that wanna be entrepreneurs need Plans B through infinity is well taken. These plans allow one to succeed when Plan A fails – as happens more than not, and, perhaps more important, salvages the investment – $, people, resources, etc. by applying them to something other than Plan A.

Put differently, successful entrepreneurs have told me that they ALWAYS figure it out as they go along – which is your point.

The chances that you will encounter no conflicts with Plan A are so slim that I believe one should not worry about Plan B at all. Instead you should constantly make variations on Plan A based on the results and data you receive. All these slight changes will probably change your goal altogether. In the end is there even a point to lettering goals? There should be one continuously evolving plan called “The Plan”.

I actually wrote a post about one of my experiences with this. Anyway, great article.

This is something I’ve been playing with a bit lately as I’ve always had a contingency plan, which many would call a plan B, and have now decided that contingency plans suck. They are a tool for diluting focus and are a means for self sabotage, as more often than not you end up settling for the contingency plan.

Let’s face it, the contingency plan was also probably devised in an equally unpredictable world as plan A. What will I be doing now – know where I want to go, decide best path to get there, when it’s no longer the best path to get there, choose a different path. Always evolving, always changing in response to an unpredictable world, and sometimes where we’re aiming for should even change in response to the environment.

From my perspective, an entrepreneur’s best strategy lies in seeing where they are for what it is, knowing they can always find a great path forward, and focusing their effort on a single path, until it’s time to change it.

I fully agree but in my experience being flexible enough to understand the need for backup plans and able to switch assumptions and viewpoints while searching for a viable business plan is often seen as not believing in the project to begin with by others.

@steveblank I disagree on “Great entrepreneurs don’t just have a Plan B, they have Plans B through ∞”

A great entrepreneur does not come up with a new plan until the existing one has expired; any current thinking on plans B through ∞ is as flawed as the existing plan A. It is based on the same assumptions.

Sometimes, the only point of Plan A is to give you the perspective to see that Plan B is a better option. I learned this recently when I realized that, while a Stanford MBA is an amazing opportunity, it wasn’t really what I wanted (or needed). I stumbled into cofounding a startup, and was about to leave it, when I realized that this “Plan B” was actually my most attractive option:

To call the La Bahia that went before the Coastal Commission “plan A” is ridiculous. It was more like plan “double Z”. Furthermore, it had seemly already been vetted by the “process”. Plans A through double Y had already been tried. The problem was the CC’s inability to see that the process was working. It was the CC that insisted that the change in the coastal plan be project driven, but it seemed like it was the fact that it was a project driven change that killed it. The CC’s needs to revise their process to allow for great projects that have been well vetted by the “process”.

[…] Basically – always be thinking about what could kill you, do your best to prepare / build buffers for it and don’t feel obligated to take a risk unless you’re sure it’s the right decision. And always have a plan b. […]

Steve, Marc Andreesen has lately been speaking against taking pivoting lightly, seeing that entrepreneurs too often take the easy way out; as an investor it is easy to agree that one bets money on one specific big idea, requiring courage to carry it through. What are your thoughts?

completely agree. some founders treat a Pivot as an excuse for attention deficit disorder.
a pivot is a change in strategy – a substantive change to one or more business model canvas components.
it should be done only after there’s sufficient evidence in-hand.